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This report is regarding the ice-cream business of Unilever. The company started its business of
ice-cream in 1994. The company was facing losses every year and looking at these figures it was decided
by J.H. Mehta, Executive Director, to revive the loss making ice-cream business. HLL sold ice creams in
40,000 outlets countrywide. But seven cities -Mumbai, Delhi, Kolkata, Hyderabad, Bangalore, Chennai
and Pune-represented two-thirds of the organized 80 million litres ice cream market. So the majority of
the sale was been generated from this portion. Therefore HLL decided to concentrate only on these seven
cities for its µKwality Wall¶s¶ brand. The number of manufacturing units was cut down to six from 40 that
were present in 1995. This was the major decision taken by the company to come out of the losses. It also
decided to launch a range of new products backed by advertisements and innovative promotional offers.
The company decided to promote Kwality Wall¶s as an umbrella brand. The ice cream division made
profits of Rs. 9.74 crores for the first time during January ± June 2003, compared to losses of Rs. 2.86
crores and Rs. 9 crores in the first six months of 2002 and 2001. But with this success the company also
realized that the sustainability was hard to maintain as there were other players in the market, so as such
the company had to plan right move at the right amount of time.

In the late 1990s and early 2000s, with the liberalization of the Indian ice cream market,
multinational companies with their premium ice cream brands started coming into the picture. The new
players included Baskin Robbins from the US based Allied Domecq International, Haagen-Dazs (owned
by the Pillsbury Company), the Iowa based Blue Bunny and the Swiss major Movenpick. Despite the
international premium brands had entered India but they could not make much success out of their
ventures. Baskin Robbins, which operated in India through a joint venture with Maharashtra Dairy
Products Manufacturing Company Pvt. Ltd., managed to capture a market share of just fewer than 5% of
the Rs 600-crore organized ice-cream market, growing at only 3% in volume terms and showing a
negligible value growth. 30 Baskin Robbins outlets were closed down across the country. The $600-
million Iowa-based Wells Dairy Inc-owned Blue Bunny ice-cream, which commenced operations in 2000
through distribution and marketing company ZZAz Shack Frozen Foods, withdrew from India in 2002.
Nestle SA acquired Swiss ice-cream player Movenpick, in January 2003. Movenpick had parted ways
with its local franchisee, Ravi Jaipuria, in mid-2002. Steep operating costs coupled with high prices, were
the roadblocks which Movenpick faced in the Indian market. There were many reasons for the failure of
global brands in India. The high import duties on ice cream was certainly the most crucial among them,
most of these new brands targeted the premium ice cream segment, which accounted for only the top 3-
4% of the population. Not only were these brands expensive, but many flavors were such about which the
Indians had no taste. Given that local ice-cream options were much cheaper and extensively distributed,
global brands obviously did not generate the required volumes.

In 2003, HLL was famous as India¶s largest Fast Moving Consumer Goods (FMCG) Company
having a turnover of over Rs. 10,000 crores, employee strength of 40,000 and more than 110 brands. In
2004, the Indian ice-cream market was valued at around Rs 1,000 crore of which the organized sector
accounted for Rs 600 crore.

The main competition in the ice cream market was between Kwality Wall¶s and Amul, owned by
GCMMF. GCMMF had startled the industry by claiming that it had become the country's leading ice-
cream seller in both value and volume terms. HLL disputed this by quoting A.C. Nielsen data, which
reported Kwality Wall's overall market share at 38.3% in 2002, against Amul's 16.7%. In individual
cities, HLL¶s share was 36.9% in Mumbai (against 35% for Amul), 36.3% in Delhi (Amul at 9.7%),
30.5% in Bangalore (15.2%) and 54.1% in Hyderabad (13.2%). GCMMF however, contested the data on
the grounds that it was limited to seven cities. Besides, ice cream was sold through exclusive Deep
Freezer Outlets (DFOs).

A

 
 

*


The Feast range of ice creams and frozen desserts, launched in 1995, was positioned as a 'youth ice cream
brand with an attitude'. Over the years, Feast expanded its 'chocolate only' portfolio by including
refreshment products like Mango Zap, Calypso Punch and Jaljeera Blast. In 2001, Kwality Wall¶s
launched the Feast Snacko priced at Rs. 15. It was a three-layered chocolate product available in the stick
format.

 

Launched in 1996, with the tag line µ0
 
    

 Cornetto targeted young adults and was
positioned as the product for romantic and special moments. In 2002, to the range of Chocolate,
Butterscotch and Strawberry Cornettos, HLL added the Super Cornetto range, which came in two
combinations - Jamaican Magic and Hawaiian Bliss. Jamaican Magic was a combination of Rum &
Raisin and Coffee, with a core of chocolate sauce cone topped with nuts. Hawaiian Bliss was a
combination of the black currant and strawberry flavors with a strawberry sauce cone and a cherry
topping. Both the Super Cornettos, which were substantially larger than the ordinary Cornetto, were
priced at Rs 30.
 



Targeted solely at children, Max was launched in the year 1999 as the X
Xice cream. Max¶s punch line
said, X 

0 
Xand encouraged all kids to go ahead and have lots of fun ( 
). All Max
products were fortified with extra vitamins. Max Cups and Max 123 had Vitamin A while Max Orange
and Max Juice had real fruit juices and Vitamin C. HLL claimed that a single Max Orange candy offered
a child 15% of his daily requirement of Vitamin C.

£ 


Kwality Wall¶s Sundaes were launched in 2001 in India in Chocolate, Strawberry and Mango flavors.
Later, HLL added a Black Currant8 sauce and Black Currant Dry Fruit pieces. Kwality Wall¶s positioned
Sundaes as an offering, which helped bring families together for fun and enjoyment, in an age when
families hardly found time to spend together. It was called the 10 PM ice cream to symbolize the coming
together of family members to have ice cream at night after dinner ( 
).

£ 

HLL had been a pioneer in tapping the softy cone segment (soft ice-cream dispensed into a cone from a
machine), whose size was estimated at Rs. 30 - 40 crore. After six months of test marketing in Chennai,
HLL announced the launch of Softy kiosks for selling softy ice creams in 2000. Investment in each outlet,
including the vending machine, worked out to Rs 7 lakh. The product was priced at Rs 5 per cone. When
Kwality Wall¶s launched its softy cones in Chennai for Rs 5, players like the Bangalore-based MTR foods
and fast food chains like McDonalds were already operating in the market. Also, there were other local
parlors selling softy cones. In 2003, the softy ice creams business accounted for less than 5% of HLL¶s
ice cream segment revenues.


Ô

   
HLL had a tough competition from Amul India. The competition was a price based competition.
Yet HLL manage to maintain itself at a stagnant position. It compete Amul on the base on the base of
quality & verity. Introducing new product range & lowering down the price, it had a competitive
advantage. Concept of home delivery & a communication channel with a tagline, ³HO JAE DIL KA
CONNECTION´ were two new concepts in the Ice-cream market.

Here, Amul has a bigger Volume Share; HLL is playing with a greater Value Share. Now, HLL
has planned to launch its International products in India with modified Indian Tests. HLL hops that it will
help getting a bigger Volume Share also.